Indias animal wealth is huge in terms of its population
of cattle (204.5 million), buffaloes (84.2 million), poultry (800 million),
sheep (50.8 million), goats (115.3 million) and pigs (12.8 million). Compared
with the rest of the livestock sector the poultry industry in India is more
scientific; it is well organized and progressing towards modernization. The
Indian poultry industrys success story is uniquely exceptional. From a
backyard venture, it has made a quantum leap to emerge as a dynamic industry.
Over the last three decades, there have been significant developments in the
poultry industry with each decade focusing on different sectors. The seventies
saw a spurt in egg production; the eighties an acceleration in broiler
production; the nineties advances in poultry integration, automation and feed
production (Fig.1). The present decade promises to exploit value added products
and the global trade avenue. The growth of the poultry industry is so fast that
authenticated statistics are irrelevant by the time they are
published.

PRESENT SCENARIO OF THE INDIAN POULTRY
INDUSTRY

India has 150 million laying hens and 650 million broilers. It
is the fifth largest producer of eggs (40 billion eggs/year) and ranks
18th in world broiler production (Directorate of Economics,
1992).

The poultry industry is one of the fastest growing sectors in
the country. The overall growth rate of the poultry industry is 15-20 percent
per annum. At present the total turnover of the Indian poultry industry is Rs.90
billion (2 billion US$) and the industry has set a target for achieving a total
turnover of Rs.270 billion (6 billion US$) by the year 2005.

The governments policy initiative under different
five-year plans has generally helped this transformation in the poultry sector,
but cannot claim to have propelled the poultry industry to its existing
heights.

The government funds research activities related to the sector
either through research organizations like Agricultural Universities/Indian
Council of Agricultural Research or through trade regulatory bodies - the
Agricultural and Processed Products Exports Development Authority (APEDA). The
government also supports the industry by extending loans through nationalized
banks especially the National Bank for Agriculture and Rural Development
(NABARD) and through technical expertise. However, the Indian poultry industry
is dominated by the private sector (World Bank, 1996).

Despite the phenomenal expansion in commercial poultry
farming, many rural households continue to raise indigenous breeds in their
backyard. The backyard poultry units, though not the main income generator for
rural producers, are called walking banks because their products are
sold to meet emergency expenses. Furthermore, they contribute substantially to
the familys food and nutrition. In urban areas the poultry products from
desi birds (indigenous birds) are sold at a premium rate for their
unique flavour and taste. This uniqueness is due to the scavenging nature of the
birds. In addition, chickens, ducks, quails, turkeys, geese and guinea fowl are
only reared in a few pockets of the country. Eggs and poultry meat are typically
marketed in fresh form. However, with the advent of cold storage facilities and
the entry of branded food products, the consumption of processed/preserved
products is gaining momentum. Further, with the urban family size getting
smaller, housewives are looking for chicken in small and convenient packs. In
addition, the rapid mushrooming of fast food chains and growing dependence on
convenience foods means the poultry sector is poised for a quantum
jump.

Figure 1 POULTRY PRODUCTION IN INDIA

Source: Private Sector Partnership in Poultry
Production

CONSUMPTION PATTERN

The average per capita egg consumption is around 36 and
that of poultry meat around 850 g per annum. However, in urban areas the per
capita consumption is 100 eggs and 1200 g of poultry meat per annum. The
NECC (National Egg Coordination Committee), which is involved in the fixing of
egg prices, has set a target for increasing annual per capita egg
consumption to 180 by the year 2015. Industry estimates are that about 75
percent of the output of the poultry industry - egg and poultry meat - are
consumed in the urban areas (25 percent of the population). In general, the
availability of eggs and broilers in rural areas is low and the selling price of
eggs higher than in the cities. Periodic and apparently cyclical gluts in
broiler supply regularly contribute to depressed market conditions, which has
led to the exit of many small and inefficient producers. Similarly, the egg
price continues to swing due to cyclical periods of excess supply, in spite of
the availability of cold storage facilities and efficient transportation. Indian
egg prices are lower compared to the price of eggs in many other countries. The
South Indian broiler industry has become highly integrated (Table 1) while the
operation in North India remains largely unorganized. The concept of integration
is limited in the layer industry to the extent of partnership activity between
farmers and traders listed in Table 2.

Export potential

Export markets are also likely to open up as subsidies on
agricultural products are phased out internationally under World Trade
Organization (WTO) agreements. By making the quality and cost of eggs and
poultry meat competitive, the Indian poultry sector is expected to capture a
significant share of the export market currently dominated by the United States,
Brazil, Netherlands and Thailand. India has already started exporting shell eggs
to gulf countries and egg powder to the European Union (EU) and Japan. India
also exports large quantities of hatching eggs to Bangladesh, Singapore,
Maldives, United Arab Emirates, Saudi Arabia and Oman and specific pathogen free
eggs to the EU for pharmaceutical purposes.

TABLE 1Type of vertical integration or contract farming
in vogue with respect to the broiler industry

I. Supplies the following inputsDay-old broiler chicks -
owns a breeder farm and hatchery to do the same.Broiler feed required by the
birds - owns a feed mixing unitMedicines and vaccines - buys quality
medicines and vaccines and supplies it to the farmers as per
requirementVeterinary services required, emergency and routine - engages
qualified veterinarians for the purpose.II. Pays the rearing cost to the
farmer towards cost of litter, labour, electricity, rent for buildings and
equipment and also a part of the profit.III. Takes back the finished
broilers and arranges for their marketing, mostly through traders.

TABLE 2Major kind of partnership activity in the layer
industry

Input by the farmers

Input/facilities by the trader

Land and housingEquipment -
cagesChicksMedicinesLabourElectricityMarketing of culled
hens, manure, gunnys

FeedVaccinesMarketing of
eggTransportConsultancy

Source: Private Sector Partnership in Poultry
Production and Marketing in India. (FAO, 2001)

DISTRIBUTION OF EGG AND MEAT PRODUCTION AMONG VARIOUS
STATES IN INDIA

Eight states account for the total egg production in India.
They are Andhra Pradesh, Gujarat, Haryana, Karnataka, Maharasthra, Punjab, Tamil
Nadu and West Bengal. Andhra Pradesh is the largest egg producing state
accounting for one-third of the countrys entire output.

In broiler production, one district of Tamil Nadu alone
accounts for more than 30 percent of the total production.

SUPPORTING SECTORS

India is almost self sufficient in all inputs required for
producing eggs and chicken meat. The Indian poultry industry receives excellent
backing from its supporting sectors, which are drawn from various input
industries. They consist of a network of about 600 hatcheries, 10 000 veterinary
pharmaceuticals, numerous equipment manufacturers, 130 feed mills and several
education and research institutes.

Hatcheries produce almost all commercial breeds of chicks that
are available in America and Europe. The annual turnover of the veterinary
pharmaceutical industry is estimated to be Rs.75 000 million, indicating the
presence of a vital support service to ensure sound health of the birds in the
country. The growing veterinary infrastructure - 40 000 veterinary
hospitals/dispensaries/first aid centres - supports livestock production with
better health care for poultry. In addition to several veterinary colleges and
premier institutes, each state government extends its technical know how and
marketing support through the co-operative sector. Even though tremendous
progress has been made in developing diagnostics and vaccines, serious problems
still exist because of the lack of adequate infrastructure for disease
surveillance and monitoring. As far as availability of equipment is concerned,
India is self sufficient in all basic equipment required for rearing and
breeding poultry. All nationalized commercial banks in the country provide
credit facilities to invest in poultry ventures. Poultry insurance is available
to cover abnormal risk of mortality.

Feed sectors

Consumption of commercial feed by the poultry sector at
present is 28 million tonnes/year. The poultry industry is highly dependent on
the feed industry, which is only 35 years old. The Indian feed industry caters
predominantly to the dairy and poultry sector. Manufacture of feeds for other
categories of livestock is practically non existent. At present, the Indian
organized feed industry produces around 3 million tonnes of feed/year, which is
only 5 percent of its actual potential. A substantial quantity of feed is
prepared by the farmers themselves in order to reduce the feed cost.

Raw materials for manufacture of poultry feed

The raw materials that are used for manufacture of poultry
feeds are grouped as follows:

1. Cereal and grains: maize, rice, wheat, sorghum,
bajra, ragi and other millets, broken rice, germs, middling and damaged wheat
that is discarded from the food industry as unfit for human
consumption.

As feed cost is the key factor in determining the
profitability of poultry farming, feed manufacturers as well as farmers attempt
to produce least cost rations by including some of the following products,
depending upon their cost, availability and nutritive value:

Availability of raw materials has increased as the production
of food grains and oil seeds in the country have risen over the past few
years.

The production is estimated to be well over 190 million tonnes
for food grains and 16 million tonnes for oil seeds. Increasing domestic
production of maize, a major ingredient in poultry feed, is likely to contribute
to the reduction of poultry feed prices. The liberalization of feed maize
imports will also increase domestic supplies and provide a cushion for domestic
production (Table 3). This will help to avoid possible feed crises such as
occurred in 1992, which severely hurt the poultry industry.

The World Bank Document on the Indian livestock sector review
quotes a number of regulations that control the distribution of feed ingredients
(Table 4). Movement controls on cereals under the Essential Commodities Act are
reported to hinder arbitrage between surplus and deficit areas, while the
Storage Control Act has been reported to limit private inter-seasonal
storage.

TABLE 31995 tariff schedule for selected feed
ingredients (%)

Commodity

Tariff level

GATT Tariff

Quantitative restriction

Binding

Exports

Imports

Feed maize

0

0

Restricted

Free

Barley

0

100

Restricted

Canalized

Rye

0

100

Restricted

Canalized

Sorghum

0

0

Restricted

Canalized

Millet

0

0

Restricted

Canalized

Soybean

40-50

100

Restricted

Canalized

Groundnuts

40-50

100

Restricted

Canalized

Linseed

40-50

100

Restricted

Canalized

Rapeseed

40-50

100

Free

Canalized

Sunflower

40-50

100

Free

Canalized

Oats

0

0

Restricted

Canalized

Oilcakes, meals

35

150

Free

Restricted

The commodities act was enacted in 1955 to control and
regulate the production, supply and distribution of essential commodities so
that they could be made available to consumers at reasonable prices. Under the
Act, interstate movement of commodities requires a general or special transport
permit. Similarly, enforcement of the act subjects wholesalers to maximum
stockholding limits. In Maharastra state, the maximum storage period is 15 days
for wholesale dealers. Continual changes in these regulations contribute to
market uncertainty.

Another major constraint to the expansion of the feed
concentrate sector is the small and highly volatile supply of quality feed
ingredients. Feed manufacturers often face problems of adulteration of feed
ingredients, such as when urea and sawdust are added to fish meal. Poor
post-harvest handling and storage of feed ingredients result in low quality
inputs. Analytical reports based on several thousands of samples spread over
five years by a premier feed analytical laboratory (Personal Communication,
2002) situated in the egg laying belt of the country suggest that ground nut
cake and maize should be regularly screened for aflatoxin. In these reports,
54.6 percent of maize samples and 99 percent of the ground nut cake tested
positive for aflatoxin. The aflatoxin menace was observed both in rainy and non
rainy seasons. Concomitant occurrence of other toxins viz. ochratoxin, citrunin
were also reported.

Quality standards are available from the Bureau of Indian
Standards, but no mechanism ensures that these standards are met by the industry
for both ingredients and finished products. The Bureau of Indian Standards has
initiated debate on the use of genetically modified organisms (GMOs) in feed in
one of its recent meetings, but otherwise no guidelines are available.

Though it is out of context to mention bovine spongiform
encephalopathy (BSE), a brief note could allay fears, especially in the absence
of regulatory mechanisms to prohibit the use of rendered by-products in cattle
feed. As cows are considered to be sacred in India, cattle are fed on vegetarian
diets devoid of feed stuffs of animal origin. Further, in the absence of feed
meant exclusively for sheep, goats and swine, the BSE problem is virtually
non-existent in the country.

Briefly, the poultry industry is growing at a fast pace, which
in itself is an indicator of the prevalence of a conducive environment. Along
with the poultry industry, the feed industry is keeping pace. Hence most of the
research work on animal feed is practical and focuses on the use of by-products,
upgrading of ingredients and enhancing productivity in order to reduce
production costs. Several innovative ideas have emerged in the trade sector to
tackle critical situations.

Above all the growth of the poultry industry should not be
viewed only from the success it has achieved from the commercial standpoint but
should also be regarded as a dynamic and vital tool for building a better and
healthier nation.

REFERENCES

Directorate of Economics and Statistics. 1992. New
Delhi, Ministry of Agriculture, Government of India.